3 Reasons Aircastle Ltd Could Be Perfect For Your Portfolio
When investing, the main objectives are growth, value, and income from a stock. When all can be found in one company, it does not get much better for an investor. Aircastle (NYSE: AYR) is appealing for investors looking for all of those attributes in a single small cap holding.
Aircastle Ltd leases commercial airliners.
Planes are bought from Boeing (NYSE: BA) and others and then leased to clients such as United Continental (NYSE: UAL), US Airways (NYSE: LCC), and KLMR Royal Dutch Airlines (PINK: KLMR). Business has been improving since The Great Recession for Aircastle Ltd. For growth investors, earnings-per-shares are increasing at a quarterly rate of 108.70 percent. While growth like that is clearly unsustainable, analysts expect earnings-per-share growth to average 24.23 percent over the next five years for Aircastle Ltd.
Even with this soaring growth, there is still much to appeal to value investors.
The price-to-book ratio for Aircastle Ltd is 0.87. That means there is more than a 10 percent discount in the stock price for the assets of Aircastle Ltd. Value investors should also like the strong cash position: the price-to-cash ratio of Aircastle Ltd is 2.99, with its price-to-free-cash flow ratio being 3.36.
For income investors, the dividend yield is 3.36 percent. The average dividend for a member of the Standard & Poor's 500 Index is around 1.9 percent. It is worthy of note that Aircastle pays a much higher dividend than the companies it does business with such as Boeing (1.58 percent); and United Continental, US AIrways Group, and KLMR Royal Dutch Airlines, which do not pay dividends.
Investors of all types should be very pleased by the heavy insider buying at Aircastle.
According to investing legend Peter Lynch, there are many reasons for insiders to sell a stock (pay tuition, buy a home, part of a pre-set program, among others). But, as Lynch advised, there is only one reason for an insider to buy: the expectation that the share price will rise. Up more than 50 percent already for 2013, those with the most knowledge about Aircastle, the company insiders, are buying, looking for the price to rise even more.
That is a bullish indicator to all investors, no matter what the objective!
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